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It appears that you evaluated income but income was not the reason for denial. Even when a decision is not made, such as a withdrawn application, you should report the income relied on in processing the application.
Great questions but the regulation and the commentary don’t specify which value you should rely on. The regulation states that you report the value that you relied on in making the credit decision, not the pricing decision. To tighten things up you may want to indicate in the file, when more than one value exists, which value was relied on for making the credit decision.
The HMDA Notice of Availability works:
“Home Mortgage Disclosure Act Notice
The HMDA data about our residential mortgage lending are available online for review. The data show geographic distribution of loans and applications; ethnicity, race, sex, age, and income of applicants and borrowers; and information about loan approvals and denials. These data are available online at the Consumer Financial Protection Bureau’s Web site (www.consumerfinance.gov/hmda). HMDA data for many other financial institutions are also available at this Web site.”
Comment 5(b) – 3.Paragraph 4(a)(16) of the Official Interpretations indicates that Code 3 would be the appropriate code for both of the reason mentioned in your question.
You are required to report the gross annual income relied on in the applicant data required by 1003.4(a)(10). Use the same income figure when calculating the debt-to-income figure required by 1003.4(a)(23). Report the income figure you relied on. If you did not calculate a debt-to-income ratio report NA.
Enter code 6 for the reason for denial – unable to verify information.
As a general rule you should obtain prior express consent from your consumer for information calls. Prior express consent may consist of the customer providing the phone number on the application. Calls for marketing purposes require prior written consent.
For which purpose are you concerned about your institution being a federal contractor? The regulation of your concern likely defines the term.
Sections 1003.4(a)(24) and (28) do not address your exact situation. It appears that the best practice is to list the property value and the CLTV based on the value used in the initial underwriting – the value given by the consumer that was used in DU.
Regulation Z does not address this specific issue.
It appears that the wife had previously acquired an interest in the property that secures the loan; therefore it does not appear to be a purchase. If the new loan satisfies and replaces the existing transaction it meets the definition of a refinance.
I am in complete agreement that the CFPB has not clarified what qualifies as an “introductory rate.” In the past the term has generally referred to a “teaser” rate, which is rate lower than the rate determined by using the index and margin used for later rate adjustments. The HMDA rules requires reporting of the number of months based on when the first interest rate adjustment may occur, whether that rate is a teaser rate or not. Comment 4(a)(26) includes the statement, “Assume an open-end line of credit contains an introductory or “teaser” interest rate…” The statement appears to refer to a “teaser rate” as an example, but not an exclusive example, of an introductory rate.
The preamble to .37(a)(13) states, “where a creditor has a policy to honor the quoted rate, but does not lock the rate pursuant to a written agreement with the consumer, the creditor would disclose “NO” pursuant to § 1026.37(a)(13)(i).” The preamble is not part of the regulation or the Commentary, but it certainly strengthens Robin’s argument.
Regulation C (§1003.4(a)(20)) requires disclosure “For covered loans subject to the disclosure requirements in Regulation Z, 12 CFR 1026.19(f), the amount of lender credits, as disclosed pursuant to Regulation Z, 12 CFR 1026.38(h)(3).” §1026.38(h)3) requires disclosure of, “The amount of lender credits as a negative number, labeled “Lender Credits” and designated borrower-paid at closing, and if a refund is provided pursuant to §1026.19(f)(2)(v), a statement that this amount includes a credit for an amount that exceeds the limitations on increases in closing costs under §1026.19(e)(3), and the amount of such credit under §1026.19(f)(2)(v).” Credits are shown as a negative amount on the closing disclosure since they reduce an amount payable by the consumer. The negative numbers from the Closing Disclosure are shown as positive amounts on the HMDA LAR.
The loan is exempt from the ATR rules because it is temporary or bridge financing, not because of which dwelling secures the loan. It appears the loan is still temporary financing even if secured by the new dwelling since it designed to be repaid from the sale of the property rather than being replaced by financing of a longer term.
The loan is exempt from the ATR rules because it is temporary or bridge financing, not because of which dwelling secures the loan. It appears the loan is still temporary financing even if secured by the new dwelling since it designed to be repaid from the sale of the property rather than being replaced by financing of a longer term.
As a general rule Regulation C, and most other compliance regulations, do not distinguish between a property taken as collateral out of an abundance of caution and properties taken as collateral for other reasons. In either situation the borrower’s home is collateral and could be lost to foreclosure.
The combined loan to value ration and the property value are reported for covered loans, even if the property was taken as an abundance of caution, assuming all of the requirements for reporting are met.
